EU audit reform talks suspended

NEGOTIATIONS on a deal forcing European Union listed companies to change their auditors every ten years have been suspended by the MEP leading the project, because of disagreements over the package of legislative measures.

The reforms, originally proposed by EC internal markets commissioner Michel Barnier in 2010, are intended to reduce the concentration of the audit services being provided by the Big Four accountancy firms of PwC, KPMG, Deloitte and EY.

Sajjad Karim, the British MEP currently steering the negotiations though informal tripartite meetings between parliament, the EU Council and European Commission, scrapped today’s planned meeting because member states failed to agree to compromises put forward by parliament.

“The parliament has made a considerable effort to find a way forward and presented a workable compromise package. But that has been only to find that the council has been unable to overcome national interests to reach an agreed position, while the commission has failed in its duties to mediate successfully,” Karim said in a statement.

“I am disappointed the council hasn’t been able to make progress. I am equally disappointed that the commission hasn’t been able to carry out its role as facilitator. In these circumstances there was no point holding a trilogue as there was nothing to discuss.”

Last month, Karim sounded confident that a deal could be agreed by the end of the year. However, according to EU sources cited by Reuters, the process has been delayed because of disputes over issues such as banning accountancy firms from giving tax advice to companies whose books they were already auditing.

Karim said he would wait for new compromises from member states before restarting negotiations.